The recent evolution of Facebook is a very important development. I often cite it in the context of the laws of asymmetric competition, which I have summarized elsewhere as follows:
1) if a for-profit entity based on proprietary software, with limited innovation based on exchange value and for just maintaining an edge, and without community support, has to compete with a for-benefit entity, using open designs of software, based on unlimited innovation for use value, and based on community support, the latter will tend to win out
2) in the case of a for-profit entity competing with other for-profit entities, the ones using open/free, participatory, and commons-oriented strategies will tend to win out.
A key example of the latter is the competition between Facebook and MySpace, while the former is opening up, the latter is becoming more restrictive. My thesis would mean that eventually MySpace would start to suffer, and Facebook would continue to grow.
I am pretty happy to read that Marc Andreessen is making pretty similar remarks, in a remarkable analysis of the new decision by Facebook to become an open platform for third party applications. This is a portentous development, and the potential is nothing less than Facebook becoming the key platform for people to people collaboration. You really have to read his analysis in full, but here are key passages.
Facebook as open platform, by Marc Andreessen:
“the Facebook API enables outside web developers to inject new features and content into the Facebook environment.
After signing up for a developer account on Facebook, the developer writes a web application (in the simplest case, a piece of web content; in the most advanced case, a full fledge web application with deep functionality) and hosts it on her own servers. The developer then registers her application with Facebook, and then users can add that application to their Facebook user experience in several different ways, including within their Facebook profile pages.
Viewed simply, this is a variant on the “embedding” phenomenon that swept MySpace over the last two years, and which Facebook prohibited.
However, what Facebook is now doing is a lot more sophisticated than simply MySpace-style embedding: Facebook is providing a full suite of APIs — including a network protocol, a database query language, and a text markup language — that allow third party applications to integrate tightly with the Facebook user experience and database of user and activity information.
And then, on top of that, Facebook is providing a highly viral distribution engine for applications that plug into its platform. As a user, you get notified when your friends start using an application; you can then start using that same application with one click. At which point, all of your friends become aware that you have started using that application, and the cycle continues. The result is that a successful application on Facebook can grow to a million users or more within a couple of weeks of creation.
Finally, Facebook is promising economic freedom — third-party applications can run ads and sell goods and services to their hearts’ content.
Metaphorically, Facebook is providing the ease and user attraction of MySpace-style embedding, coupled with the kind of integration you see with Firefox extensions, plus the added rocket fuel of automated viral distribution to a huge number of potential users, and the prospect of keeping 100% of any revenue your application can generate.
The leadership that the Facebook team is showing here rivals anything that the large and established software and web companies have done in this decade.
You may also notice the irony of Facebook leapfrogging MySpace on embedding at the same time that MySpace seems to be getting substantially more restrictive, in some cases even shutting down third-party widgets.”
Limits to Openness
Marc also notes some limits on the openness, one, that everything has to be routed through Facebook servers.
He then also adds:
“Third, there are three very powerful potential aspects of being a platform in the web era that Facebook does not embrace.
The first is that Facebook itself is not reprogrammable — Facebook’s own code and functionality remains closed and proprietary. You can layer new code and functionality on top of what Facebook’s own programmers have built, but you cannot change the Facebook system itself at any level.
The second is that all third-party code that uses the Facebook APIs has to run on third-party servers — servers that you, as the developer provide. On the one hand, this is obviously fair and reasonable, given the value that Facebook developers are getting. On the other hand, this is a much higher hurdle for development than if code could be uploaded and run directly within the Facebook environment — on the Facebook servers.
The third is that you cannot create your own world — your own social network — using the Facebook platform. You cannot build another Facebook with it.”
Success kills:
Application developers have to ready for a strong surge in users, and he gives some impressive numbers, and he concludes that such success easily kills those unprepared to invest.
Therefore: “the Facebook Platform is primarily for use by either big companies, or venture-backed startups with the funding and capability to handle the slightly insane scale requirements.”
Don’t forget to check the links to other facebook commentary at the bottom of Marc’s posting.